6th Central Executive Committee Meeting
Balancing Jobs, Working Hours, and Wages
RENGO Stance on Work Sharing

(22 March 2002)

At the 6th Central Executive Committee Meeting held on March 7, RENGO endorsed its position on work sharing. In it, RENGO defined work sharing as "employment creation through shortening normal working hours." Moreover, in view of the current situation in Japan of a high jobless rate coexisting with long overtime hours, it stated that in order to realize work sharing, "things should start from 'sharing work among those who work too much with those who cannot find a job'.

I. Recognition of the Current Employment Situation
1. The Worsening Employment Situation
  Japan's jobless rate has continued its worst record ever since reaching 5% last July, and it shows no signs of having bottomed out yet. In particular, employment problems have now turned into grave social problems, [1] the jobless rate among young and middle-aged to elderly workers is especially high, [2] jobless periods are expanding, [3] the percentage of unemployment insurance recipients is decreasing and [4] when those who gave up looking for jobs are figured in, the actual jobless rate exceeds 10%.
Behind this situation is the fact that [1] government policies are pushing "structural reform" giving preference to supply while neglecting deflation, and [2] managerial policies emphasize short-range profits and prioritize personnel cost reduction. Take together, both are spurring a destabilization trend in employment and undermining labor conditions.
  2. Large Imbalances at Work
    Amidst the worsening jobless situation, quantitative and qualitative imbalances in employment as well as imbalances between living standards and work have been expanding.
(1) Imbalances between Employment and Working Hours from a Micro Point of View
  In the first place, we cannot overlook the fact that there are many unemployed on the one hand and unimproved real conditions of long work hours including unpaid overtime on the other. Among these conditions, overtime working hours without pay has been rising ever since 1997.
(2) Imbalances in Forms of Employment and Work Arrangements
  In contrast, labor overall is turning into 'cheap labor' and differentials in labor conditions are widening along with the attrition of regular workers and the acceleration of non-regular workers.
(3) Imbalances between Work and Living
  According to a Metropolitan Tokyo survey, 70% of all working women and 40% of all working men claim that it is difficult to successfully juggle work and family. The rate of women who feel "that successfully combining both is burdensome" particularly expanded from 59% in 1995 to 73% in 2001—"Combine Home and Career" is in fact suffering a setback.


II. The Basic Stance on Work Sharing
1. The Necessity of Work Sharing and Its Framework
  To improve the severe job situation and imbalances between work and living as described above, conventional efforts by labor and management in individual companies alone have hit a ceiling. Establishing a social framework for maintaining and creating employment along with economic and employment measures by the government are indispensable. In addition to sharing a sense of crisis that solving job problems is a fundamental issue to society as a whole, work sharing can be described as an aggregate measure "to bring balance to employment, working hours, and wages and create quality employment."
Based on these real conditions, RENGO jointly disclosed its "Declaration to Promote a Social Consensus on Employment" with NIKKEIREN last October and has been discussing job promotion measures including work sharing ever since.
  2. Views on the Study of Work Sharing
    "Imbalance in the forms of employment or work arrangements" and "imbalance between work and living" are not only created by the current economic situation but also been generated by the corporate environment system and industrial society themselves ever since the end of the war. It is important to take the view that we must solve distortion on both sides of: [1] polarization of long work hours and part-time labor at workplaces, [2] fixed gender role divisions in the home and communities.
At the same time, when balancing employment, working hours and wages, it is necessary to create a new way of working, that is, a new life style, in which each of us not only secure a proper allocation of time in the workplace but also maintain [1] one's own time, [2] time with one's family, and [3] time for one's community.


III. Concrete Work Sharing Activities
1. Job Creation through Sharing Working Hours
 
(1) The Idea of "Sharing"
  Work sharing is, primarily, "sharing work among those who have it with those who do not." It is a measure to whose original goal is to "create employment" rather than "not further increasing the joblessness." More precisely, it is the creation of employment through sharing workloads—working hours—or through shortening normal working hours.
(2) Examples in Other Countries
  We can find progressive examples of work sharing as a macro measure for all society in other countries. The types vary with the actual conditions in each country: [1] shorten weekly working hours based on labor-management agreement (Germany), [2] shorten legal working hours (France), [3] shorten legal working hours with an increase in short-time workers (Holland), and [4] shorten working hours for the elderly and use early retirement (Sweden).
(3) Sharing Overtime Hours
  As mentioned above, currently Japan has a high jobless rate along with long overtime hours including unpaid overtime. The reality is that from macro point of view we must start by "sharing work among people with too much of it to those without it."
[1] Regulate Unpaid Overtime and Chronic Overtime
  It would be impossible to attempt to balance employment, working hours and wages, by leaving the management of working hours and personnel in its current fog. Eliminating unpaid overtime, which is in the first place illegal, is the fundamental premise. (The Japan Productivity Center for Socio-Economic Development estimates that 900,000 new jobs could be created by abolishing unpaid overtime utilizing a macro perspective.)
At the same time, conditions in workplaces where overtime work has become habitual should be immediately improved although it will be imperative to respond to a degree of temporary overtime work when Article 36 of the Labor Standard Act is concluded. ("...employers may, in accordance with the provisions of such agreements...extend the working hours or have workers work on rest days.") It is necessary to conduct appropriate personnel allocation based on the assumption of "stopping habitual overtime work." (Meanwhile, local governments are attempting to create jobs by reducing overtime payment. This is, however, one measure for emergency job creation rather than work sharing.)
[2] Raise the Premium Rate for Overtime Work
Behind continuous overwork at numerous workplaces, lies the actual fact that the overtime premium rate in Japan is lower than that of other Asian nations. Even from the point of fair international competitiveness it is necessary to raise the premium rate.
[3] Activities by Government, Labor and Management
  RENGO will demand that government, labor and management each do their part to: a) abolish unpaid overtime, b) reduce habitual overtime, and c) raise the overtime premium rate. Also, RENGO will fortify activities to see that workers take all paid holidays as well as taking long vacations. Especially with matters regarding unpaid overtime work, RENGO will seek radical fortification of official inspections and prosecutions by the Labor Standards Supervision Office.
(4) Sharing Normal Working Hours
  In order to create jobs through shortening normal working hours, RENGO will study effective measures while planning to shorten legal working hours, including relaxing the requirements for extending applications of labor agreements in the Trade Union Law.
Further, regarding urgent measures, RENGO will push ahead with its activities to build a social framework that will promote and support independent activities based on independent labor-management activities in each company, industry and local area.
Likewise, it will be necessary to proceed with studies on the possibility of expanding employment that center on young people by shortening the working hours of the elderly.
[1] Promoting Measures for Independent Labor-Management Activities
  Efforts to create jobs through shortening normal working hours will change the current combination [number of employees multiplied by working hours] based on the premise that the amount of work will not change. When advancing this through independently in labor and management, possible cases include: a) increments in the number of employees that accompany cost burdens for management such as welfare expenses and overhead costs, b) employee incomes will decrease because of shortened working hours.
On account of this, we need further studies on the government-labor-management level for effective measures to support companies and workers through effectively combining systems such as legislation that promotes shorter working hours and aid for new hires which are already in effect. At that time, it is conceivable that each local government will effect their own support measures.
[2] Conducting Model Projects
  Modification [number of employees multiplied by working hours] can be easy or not depending to the nature of work, so it is difficult to uniformly apply those measures even to workplaces where wage levels are not so high. Consequently, it seems realistic to conduct model projects through labor-management in industries and businesses where it is possible to pursue independent activities. With this view, RENGO will promote studies to be carried out at each industry's liaison councils on the possibility of conducting model projects, pinpointing the exempted fields.
  2. Job Creation by Expanding Alternative Working Methods for Workers
   
(1) Quality of New Jobs
  Newly generated jobs through the introduction of work sharing must not be a mere expansion of cheap labor. Ongoing "diversification" of employment is an expansion of choices for management aiming to reduce costs, which is ambivalent to work sharing. Now a radical change of the expansion of alternatives is needed from the side of management to workers and a shift away from a mere quantitative expansion to a qualitative expansion of good employment opportunities.
(2) Expanding Working Method Alternatives for Workers
  In order for diversification of working methods to equal a real expansion of choices for workers, it is necessary that the following points be set out as indispensable conditions:
a) no differentials in the aspects of job stability and labor conditions no matter which courses were chosen.
b) courses should be selected freely at any time in a person's life-stage.
c) no discrimination by form of employment or work arrangement in companies or society.
This should be welcomed also by companies from the perspective of exerting productivity equally regardless of what kind of working methods are chosen.
[1] Abolition of Distinctions Between Regular and Non-Regular
  For the purpose of expanding alternatives, it is necessary to establish working methods that break down distinctions among regular, non-regular, permanent, non-permanent workers. This includes 'short-time permanent workers' such as those 6-hour workers who would become as common as 8-hour workers. At some private firms and in certain parts of the public sector, these kinds of systems are already beginning to appear. It is an issue, which will be possible for us to work on at labor-management negotiations within companies without waiting for legislation.
[2] Development of an Out-Sourced Labor Market and Principles for Equal Treatment
  Behind these large labor condition differentials in the form employment or work arrangements, lies the factor that an out-sourced labor market has not been developed, as long as the rules for equal treatment have not been established in companies. In other words, we need to establish principles for equal treatment in jobs that are not based on company rules but rather on social rules that supercede them. At the same time, it is necessary to fortify activities for a legal minimum wage to raise the basic labor conditions.
[3] Japanese-style Employment System and Equal Treatment Principles
  In the Japanese employment system however, the idea of an hourly wage for regular workers has not been specified as we lack a clear image of jobs like western countries. From now on we need to pursue a process that: a) reviews conventional working methods from the bottom up, and at the same time b) builds our own principles for equal treatment not like those imported from the West.
[4] RENGO's Activities for Establishing Equal Treatment Principles
  Establishing principles for equal treatment and developing an out-sourced labor market are issues which demand a review of the entire Japanese-style employment system. These are issues that need to be proceeded with as mid to long-term activities and RENGO will conduct the following measures.
a) To establish equal treatment principles based on jobs, seek legislation abolishing discriminative treatment against short-hour or/and temporary workers, while work to build norms for equal treatment through resolving specific cases.
b) When building these norms, promote study that is based on the working methods which make it possible for both men and women to balance careers and home, not on current methods which ask regular workers to work habitual overtime and relocate at a company's request as it were naturally-expected.
c) So the diversification of working methods will contribute to the expansion of alternatives for workers, RENGO will work to improve the tax/social security systems by setting: i) non-regular worker's working hours to one half of those for regular workers as a requirement for social insurance and ii) yearly income requirements under ¥650,000 to qualify as a dependant.
[5] Roles of Government, Labor and Management
  In order to firm up the preceding points, it is indispensable to create a framework through a "social consensus." RENGO will seek to create a clear distinction among the roles of each at labor-management and government-labor-management forums.


IV. Responses to Emergency Refuge (Job Maintenance) Work Sharing
1. Labor and Management Facing Job Maintenance in Each Business
  The work sharing measures described in previous sections aim to build the new work methods and lifestyles from a mid to long-term point of view based on an awareness that current methods have reaching their limit. Under the current economic circumstances, many businesses face their own problems including their survival and job maintenance. The fact is that labor and management in these businesses want emergency refuge job maintenance measures to respond to recent problems before creating employment by work sharing.
  2. Framework for Emergency Refuge (Job Maintenance) Work Sharing
    We call it Emergency Refuge Work Sharing and will respond to incidents at businesses where personnel cuts were unavoidable due to temporary declines in corporation performance and management agreed with labor temporarily on shortening regular working hours to maintain existing employment.
(1) Prerequisites
 
[1] Unpaid overtime remains unaddressed as does habitual overtime and every means must be employed to avoid employment adjustment.
[2] Labor-management agreements should have been concluded on matters including maintaining jobs, changing labor conditions, instituting measures to restore modifications, and an implementation period.
[3] Although accompanied by a income reduction due to shortened working hours, hourly wages should be guaranteed and should not fall under the category of an unfavorable change in labor conditions based on past cases (*).
* When cutting back labor conditions through labor contracts, legal precedents have established that normal validity is denied past certain limits.
(2) Support Measures for Emergency Refuge Work Sharing
  It is also necessary to make temporary support measures for the activities mentioned above to maintain employment by individual businesses. In these support measures, we should recognize that "not increasing joblessness" is a social problem and we need to temporarily bear the costs through the general account and not leave everything to individual labor and the management of companies.

<Support Measure #1>
Support Measure for Individual Businesses
  When downsizing at companies becomes unavoidable for reasons of production or business strategy, that business will shorten working hours and: [1] corporate managers will promise to maintain employment, [2] businesses that reached agreements with workers to allow a set income decrease (hourly value unchanged) due to shorter working hours, [3] the government will partially cover costs incurred for those businesses.

<Support Measures #2>
Support activities that promote work sharing at local businesses (institutions).


V. Responses to Urgent Employment Adjustments
1. Responses to Employment Adjustment
  We will differentiate between the various "employment adjustment" measures conducted in individual companies and emergency refuge (job maintenance) work sharing and work on them along with the following ideas.
(1) Activities under the Responsibility of Industrial Federations and Unit Unions
  Consider individual employment adjustment measures as streamlining measures taken on by industrial federations and unit unions.
(2) Roles of Labor and Management Organizations
  In order not to have any unilateral cuts in working conditions or other unfavorable changes, labor and management organizations on every level should reconfirm the following points and faithfully inform each company.
[1] Easy employment adjustments must not be conducted. [2] One-sided downsizing of labor conditions or unfavorable changes should not be conducted. [3] Full discussion between labor and management is necessary when making changes in labor conditions or employment adjustments. [4] Compensation for shorter working hours and/or temporary shut-downs is indispensable when they are conducted for a company's convenience.
  2. Public/Social Employment Measures
    It is fundamental that individual job adjustment should be the responsibility of each labor-management. However recent employment problems suggest a difficult situation that problems cannot be solved only by individual labor and management's responsibilities. Now there is a pressing need to conduct measures that break the current deflationary economics as well as urgent and comprehensive employment measures taken by the state responsibility.
(1) Policy Change to Check Deflationary Spiral
  What the government must immediately enact are policy changes that keep the Japanese economy from plunging into a deflationary spiral and also economic recovery measures from the demand side. To that end, every possible means should be taken to wipe away employment insecurity and future anxiety.
(2) Conducting Comprehensive Emergency Employment Measures
  At the same time government should not delay in conducting the following emergency job measures to realize "full employment" as established by the Employment Measures Law: [1] New job creation through the responsibility of the government and local governments. [2] Expansion of a job safety-net such as employment insurance benefits. [3] Expansion of job training and skill development that would lead to re-employment.


VI. Plans to Advance Future Studies
1. Internal Reviews at RENGO
  RENGO will continue to study at its high-level meetings (president, deputy and vice presidents, general and assistant general secretaries) and the Central Executive Committee for future clarification of activities. RENGO will also promote exchanges of opinions and information at the "Work Sharing Study Group" (consisted of officers in charge at industrial federations), which is already established. At the same time, it will establish a task force consisting of officers from industrial federations and the RENGO secretariat in order to promote further study on definite measures.
  2. Consensus Building at Labor-Management and Government-Labor-Management
    RENGO and NIKKEIREN have confirmed that they will compile an interim report in March-April. At government-labor-management study meetings, RENGO will work for consensus-building activities as soon as possible for [1] urgent and [2] mid-and-long-term measures.


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